Less than a year after receiving a record contract from management, American Airlines pilots still aren’t happy but now for a new reason.
If you are considering booking travel or signing up for a new credit card please click here. Both support LiveAndLetsFly.com.
If you haven’t followed us on Facebook or Instagram, add us today.
American Airlines Pilot Deal
Last year was an intense year for labor negotiations. First Delta executed a new contract for highly coveted pilots to both retain and attract new talent. Then, American Airlines reached a “historic” agreement with pilots paying them more than ever before. Not to be outdone, United closed a deal with its pilots better than American, only for labor to decide their prior historic precedence was insufficient and ratify the deal for an extra $1 billion over the four-year term.
So now, surely, everything is good, right?
Certainly not. It begs the question as to whether a labor group is ever happy with their deal, despite 73% participating in the last vote and resoundingly voting in favor of the revised contract.
Union Bosses Are Management Too
In a message last week to member pilots at American, APA President, Ed Sicher, disliked proposed changes to the business model management would like to run. Management suggested it switched focus to smaller markets served by smaller planes and filtering into the wider network.
“Unfortunately, the news isn’t good from our pilots’ perspective. Chief Executive Officer Robert Isom sees future profitability as dependent on growth opportunities in underserved domestic markets, with the crux of his business plan revolving around these marginal locations. In other words, the airline management team responsible for producing profit margins that badly lag those of Delta and United believes that opportunity beckons by taking on Southwest Airlines and the ultra low-cost carriers.” – Simple Flying
Working backward, the notion that Southwest should be lumped in with Ultra Low-Cost Carriers demonstrates a lack of business acumen. In a study of airfare across the United States, Southwest is more expensive than competitors by $5 or more 65% of the time and that includes factoring in Southwest inclusions such as free bags. But throwing the notion to the side for the moment, wouldn’t an airline want to emulate a carrier that posted 34 straight years of quarterly profit without missing until the pandemic (and resuming afterward?)
Delta is far and away more profitable than United or American and profit shares with labor groups. But is that down to route selection or other aspects of their business?
And if he agrees (which he seems to) that these markets are underserved, why not serve them? Surely feeding passengers from Sioux City, Iowa on small jets to Chicago or Dallas/Fort Worth will then add to mainline load factor as they get wherever they were flying to from a hub. I love that he continues to call management “all too often penny wise, and dollar foolish.” Wow. Within a year of getting a 40% raise and then a mostly uncontested bump on that by a cool billion, management is considered cheap.
Does the APA president think he should pick routes too? Does his experience stretch from beyond the cockpit and bargaining table to revenue management as well? It’s a little bit ironic that pilots complaining about work scope, are telling management which routes to run, right?
Here’s the video:
The Real Concern Is As It Ever Was – Scope Clause
Scope clause, for those who are unaware, is the part of the contract that relates to jet size and payscales. In the airline industry it is achieved by seat number and in this case, the magic number is: 76 seats. Pilots of flights with 76 seats or less can be paid dramatically less than mainline aircraft so what the union boss is trying to avoid would be switching mainline aircraft with 150 seats for 76-seat aircraft that may be better suited to the mission. Growing in markets where only smaller jets are required takes away from growth options on larger jets in bigger markets.
American Airlines’ revenue management concept here makes sense, however. If you can get underserved markets onto your aircraft, that grows the total market rather than trying to steal from competitors by offering lower prices or a better product – the latter is almost decidedly not a route it will take.
Sicher, in his role as President of the APA, is protecting what he just secured. If American growth isn’t adding another two flights per day to Orlando on big jets, but rather new flights to Erie, Buffalo, or New Haven then the new pay the contract scored will be a moot point. Still, for the carrier, the method makes sense – go to markets that need seats and where there’s less competition. It just doesn’t make sense for a union boss who can’t affect pay for his members in those markets to the same degree he can on mainline aircraft.
What Sicher and pilots more broadly at American have to come to terms with is that the airline at this point is a loss-making venture, solely earning profits (less than $20 million last quarter on tens of billions of dollars in revenue) from its loyalty program and bank agreements. While that might suggest that American Airlines management should take any tips it can get in the form of running a for-profit carrier, this plan seems to be that.
Conclusion
American Airlines pilots are unhappy despite achieving a record contract because it could mean more regional flying. The labor union president of the APA, Ed Sicher, belittles management and takes them to task over this strategy. There’s no suggestion for how to make money like Delta and United, just a suggestion that it should. This analysis also avoids profitability models that include an all-mainline airline in Southwest. The “never good enough” take on greedy management is getting a little tired, especially for pilots with one of the best deals in the industry. It also strays from the President’s own scope of managing pilot deals into route picking and strategy decisions. More than anything, it calls to mind pilots drying their tears over these proposed changes with fistfuls of hundred-dollar bills while management’s current strategy is failing to return profitability from actually running an airline.
What do you think?
Get Daily Updates
Join our mailing list for a daily summary of posts! We never sell your info.
@AA pilots … Guess what ? Military pilots in war don’t snivel . Sniveling evokes “being spoiled” , as you know .
Cry me a river with all the money they make. Stfu
Unions are the enemy. Such ‘special’ people. Lesson #1,898,663
Not all unions. Many have done good for their members and for the work force as a whole.
The union should have considered that changes might be made. Maybe the union bosses ought to complain in front of a mirror and stop whining. It could be worse.
DEI = Didn’t earn it.
Gather, everyone, and witness the right wing reactionary as they transition to the new culture war buzzword du jour. This process occurs approximately every 3 months alongside the ebbs and flows of conservative media coverage. CRT and ‘woke’ just don’t scratch the same itch that they once did, so they must seize upon a new vocabulary word to cling to relevance in Q2 2024.
You say reactionary like its a bad thing. The past, especailly in regards to culture and the nations zeigeist was objectively much better in the past than in the present. We win the “buzzword culture war” because the majority of people are with us.
We won against the groomers by passing hundreds of laws on the state and local level that banned males invading women’s spaces and the abuse of young childrens biology, to the point where drag shows are so taboo no business will host them anymore.
We won against CRT and changed the makeup of entire schoolboards nationwide. Even the word CRT is so toxic now that people have to distanced themselves from it.
And we are winning against the DEI/ESG forces. Even Larry Fink and blackrock have dropped thier ESG fund and department. Everyone is linking DEI with the competency crisis and justly so.
Unlike lefties that create moral panics about “trans genocide” and so-called “systemic racism” which do nothing but get their low info emotional voters to the polls just in time for elections only to drop it afterwards, ours actually get results.
It’s not the left vs right. It’s right vs. wrong.
No, it’s two extremes on the far left and far right. Both of whom deserve each other. Each feeding off the other. Meanwhile the majority, who are common sense Americans, are ready to throw you all out of the sandbox.
Thanks. This actually explains exactly what is going on with these people. I couldn’t figure it out until you made the point. Since they don’t have a relevant political party with relevant ideas, they tout culture words like DEI, Woke, CRT, Immigration, etc to maintain discourse so that they and their dead horse can have a seat at the table.
Happy to have made you aware of it, Martin! Now that you know the pattern you’ll be better equipped to avoid the BS when they come up with the next thing when DEI starts to bore them.
Got to love left wing projection.
An accusation by the left is a confession.
People like him just really want to say things the N-word publicly and can’t, so they have to use phrases like this instead.
Man, you people get sand in your neo-fronthole when real humans call out DEI.
@Emach Otherwise known as Egregiously Malicious Antagonistic Communist Heretic
Ah if it isn’t Jake Knows Fascism, back at it again with the bad takes
Oh I’m so glad I get to continue my nature documentary.
*Ahem*
Here, dear viewer, we see the the reactionary deploy one of its most common defensive tactics.
Embarrassed that they were caught out as being several weeks behind the fold on the uptake of DEI as the new “it” topic, they launch into a diatribe of the “greatest hits” fed to them from their one dimensional media bubble which we’re each conceived of and approved by The Manhattan Institute to drive clicks, controversy, and campaign contributions.
Listed include the groomers (but never the ones in the Church doing the real grooming), CRT (never taught in the primary/secondary school level so school boards are irrelevant), and a rehash of DEI (with no evidence linking DEI to anything in this article). Reallya word salad of drivel meant to appear as though something of substance is being said, but in reality just a defensive bluster to save face.
All of those things have a proven documented record of happening not just “made up” issue that you libtards thing is being pushed.
Just because you continue to lose on the important issues didn’t mean they aren’t real.
America’s changing demographics must really terrify you.
*ahem* this isn’t reddit where you can spout your fantasy like truth.
60% of ped0s belong to the LGBT
“60% of ped0s belong to the LGBT”
Fake statistics.
But 100% of Koggerj’s are racist @ssholes.
@Emach. I love it. The more Emach is triggered, the more accurate the accusation. His/Her/It’s pathetic attempt at deflection is telling. The Left hates it when you uncover their dark sewer actions.
All of this moaning and whining and complaining is not helping American. Many of my colleagues have joined me in avoiding American like the plague. You couldn’t pay us enough to fly American. We’re all fed up with American’s lousy attitude, especially in the cabin. So, kids, grow up. Be thankful for what you received in the contract negotiations knowing full well that you certainly didn’t earn it nor do you deserve it.
Unions have become the enemy of a happy workforce. Their business model requires grievance and injustice. As a result, union workers are constantly inundated with negative messaging encouraging dissatisfaction and anger. It’s bad for business, bad for employees, and bad for the customers who must deal with chronically angry workers.
No, many unions have and are doing good work for their employees and workers as a whole. It’s just some bad apples, just like in all parts of life. Some unions are better than others.
Koggerj,
You are not winning. Your views attempt to return this country back in time. There is no time machine. If we do not move our country forward we surely are lost. Embrace reality and change. We need a middle ground.
Actually our view are rational and held by the majority white and black.
In your head.
Just in case you didn’t get the reference to Zombie, the Cranberries etc.
Ed Sicher is a typical Union thug. His rant is not the sentiment of the average line pilot. He is out of touch with line pilots and is trying to justify his position by criticizing our management. Ignore his worthless rant. Ed has no clue how to run an airline any more than a ten year old would.
Ed Sicher and APA don’t represent the thoughts of the average line pilot at AA. I love my job, and I love AA and I don’t appreciate the negativity from the union. APA does a great job supporting pilots but a terrible job in communication. I hate the fact that people think the ramblings of one grumpy old man represents the thoughts of 16,000 pilots who a quarter now are a completely different generation.
I appreciate your perspective! Thanks for the comment.
FYI: The Unions literally priced THEMSELVES out of Long Haul and ESPECIALLY Ultra Long Haul routes. Even with the current outlandish rates AA is charging, I highly doubt ajy of those flights could be profitable. Now when the FA’S get their crazy deal, the airline will have to file bankruptcy, again. And “Hopefully” will restart with no unions. They shelter lazy workers and keep union management rich. That’s all. The ticket/counter agents got massive raises the past year and they have been consistently awful, even at HQ DFW. Just stand around and gossip and don’t help the Priority Lanes and instead they to get you to go to the self service. Ummmm….I just paid thousands for my seat, I’m not tagging my own bag. Period.
The pilot group will bankrupt their airline and not just at American. The big three need to do away with scope and bring all the regional jets in-house.
Or someone with good sense needs to start an all new airline that focuses on premium products using A220 and the larger E2 series of Embraer charging the same as all first class and letting the seats full because they will be with a better product and using more economical planes like the ones mentioned.
It’s been tried. Every angle. Your example was tried in the 90’s with Midwest Express. It worked to an extent when they were under the radar but as soon as they started to grow the majors handed it to them. There is no all premium model that will ever work on any aircraft or with any startup. Not because the product is lacking, but because you can’t break down the wall of the Big 4. Soon to be 5. The highway is littered with those that tried.
Ironically, at least in my opinion, the APA & AA exist for the exact same reason and that is to make money. The larger the contract the APA extracts from AA for their clients the more money they make from their same clients. The APA may be chartered, organized, created (what ever is the correct term), as a non-profit , (the NFL operated as a non-profit until around 2015 I believe, the APA is not in the business of losing money.
Time to take the train. Unfortunately, the people aren’t happy either.
Too bad there are no high-speed trains in America.
The way American’s scope clause is structured, the only way for the airline to grow regional flying is to grow mainline narrow body flying.
If you’re not happy with the ‘culture of the company’ you work for, you’ll find other excuses not to be happy…